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Working capital analysis By Michael
Topic of Analysis
Company A Company A’s CA equal 100. Company A’s CL equals 90 Working capital percentage equals 111% Absolute working capital equals 10
Company B Company B’s CA equal 30. Company B’s CL equals 20 Working capital percentage equals 150% Absolute working capital equals 10
Conclusion As we can see first measure gives us ground for making appropriate decision  that  company B is financially  healthier than company A.  While absolute working capital measure tells us that both companies posses the same financial attractiveness and investor should be indifferent in choosing better one.

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Working capital analysis

  • 3. Company A Company A’s CA equal 100. Company A’s CL equals 90 Working capital percentage equals 111% Absolute working capital equals 10
  • 4. Company B Company B’s CA equal 30. Company B’s CL equals 20 Working capital percentage equals 150% Absolute working capital equals 10
  • 5. Conclusion As we can see first measure gives us ground for making appropriate decision that company B is financially healthier than company A. While absolute working capital measure tells us that both companies posses the same financial attractiveness and investor should be indifferent in choosing better one.